FAF

Find winning stocks in any market cycle. Join 7 million investors using Simply Wall St's investing ideas for FREE. First American Financial stock has delivered a 32.9% return over the past three years, yet current valuation checks and recent share price softness raise questions about how much upside is still reflected in the current US$72.26 level. The 32.9% three-year return signals that the market has already recognised some of First American Financial's strengths, which makes the current valuation more important for new capital. Future demand for title and related insurance services can support cash flow expectations, while any pressure on real estate transaction volumes or claim trends may weigh on how investors price that cash flow. First American Financial scores 4 of 6 on Simply Wall St's broader valuation checks, which points to a mixed picture rather than a clear bargain or clear overvaluation 4. The issue now is whether the recent track record and current valuation multiples leave enough room for further gains in First American Financial stock without stretching expectations. First American Financial delivered 12.6% returns over the last year. See how this stacks up to the rest of the Insurance industry. The P/E ratio suits First American Financial because earnings are a central driver for a mature, cash producing insurer. On this measure, the stock trades at about 9.9x earnings, which is slightly below both the Insurance industry average of roughly 11.2x and the peer group average of about 10.0x. That already places the company at a modest discount to what investors are currently paying for similar earnings streams in the sector. The tailored fair P/E ratio for First American Financial is 11.7x. This reflects what the model suggests investors might typically pay given its size, risk profile and profitability. The current 9.9x level sits below this fair ratio, so the market is not pricing the stock at the premium that this framework would support. If you are comparing options within US insurance stocks, this gap on the P/E multiple may be worth noting. Overall, First American Financial stock appears undervalued on the P/E multiple compared with both sector norms and the modelled fair ratio. See what the numbers say about this price — find out in our valuation breakdown. Simply Wall St Narratives for First American Financial pick up where the valuation puzzle leaves off and spell out which expectations for growth, margins and earnings would need to hold for the stock to be worth materially more or less than today’s price. Each narrative is framed as a thesis about how First American Financial's business could evolve, so you can revisit it over time and see whether the story still fits the facts. You can add your voice to the Simply Wall St community by setting out a clear, number-driven narrative on First American Financial's valuation, growth and execution from this point onward. Share your thesis on what you think the market is missing today and see how it holds up as new information arrives. Do you think there's more to the story for First American Financial? Head over to our Community to see what others are saying! First American Financial looks modestly undervalued on its P/E multiple, with the current price not reflecting the higher ratio that the tailored fair multiple suggests. The mixed score on broader checks means the stock does not screen as a straightforward bargain, but it also does not look aggressively priced. The real dividing line between the bull and bear cases is whether cash flows from title and related insurance can hold up well enough to support the current discount without new pressure from real estate activity or claims. This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned. Companies discussed in this article include FAF. Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

A month has gone by since the last earnings report for First American Financial (FAF). Shares have added about 4.4% in that time frame, outperforming the S&P 500. But investors have to be wondering, will the recent positive trend continue leading up to its next earnings release, or is First American Financial due for a pullback? Well, first let's take a quick look at its most recent earnings report in order to get a better handle on the recent drivers for First American Financial Corporation before we dive into how investors and analysts have reacted as of late. FAF Q2 Earnings Top Estimates on Title Strength, Investment IncomeFirst American Financial Corporation reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 4.4%.The quarterly results benefited from robust commercial title business, higher average revenue per order, solid investment income growth and continued strength in information and subservicing businesses. Elevated operating expenses partly offset these gains. Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. The figure exceeded the Zacks Consensus Estimate and our model estimate by 2.3%. Investment income totaled $183.7 million in the second quarter, up 14.7% year over year, supported by higher interest income from the investment portfolio. The title segment increased 12% in investment income, partially offset by losses at the corporate level. The figure was above our estimate and the Zacks Consensus Estimate of $182.3 million.Expenses increased 11.4% to $1.83 billion, primarily due to higher personnel costs, production expenses, premiums retained by agents and a rise in interest expense. The figure was above our estimate of $1.80 billion. Title Insurance and Services: Total revenues rose 16.9% year over year to $2 billion, which beat the Zacks Consensus Estimate by 6.2%. This was driven by 15% growth in direct premiums and escrow fees, agent premiums and steady net investment income. Investment income increased 11% to $164 million, supported by higher interest income from the company's investment portfolio.Adjusted pretax margin expanded 310 bps to 15.7%. Title open orders increased 0.7% to 188,200, while closed orders declined 0.7% to 137,300. Average revenue per direct title order increased to $4,572, reflecting a 31% increase in commercial average revenue per order, partially offset by a mix shift toward lower-premium refinance transactions.Home Warranty: Total revenues rose 3.3% to $113.8 million, exceeding our model estimate of $111 million. Pretax income climbed 8.5% year over year to $24.2 million. The claim loss rate improved to 40%, due to lower claim frequency, partly offset by higher claim severity. Pretax margin expanded 110 basis points to 21.3%.Corporate: The Corporate segment reported a net pretax loss of $56.2 million, narrowing from a $43.8 million loss in the year-ago quarter. First American exited the second quarter of 2026 with cash and cash equivalents of $2.6 billion, up 89.6% from the 2025-end level. Notes and contracts payable were $1.5 billion, remaining flat from the 2025-end level. Stockholders’ equity was $5.6 billion at the end of the second quarter of 2026, up 2.2% from the 2025-end level. The debt-to-capital ratio was 31.4. The board of directors paid a dividend of 55 per cent per share in the second quarter. FAF repurchased 0.3 million shares for $20 million in the reported quarter at an average price of $61.99 per share. In the past month, investors have witnessed a upward trend in fresh estimates. The consensus estimate has shifted 6.84% due to these changes. Currently, First American Financial has a average Growth Score of C, however its Momentum Score is doing a bit better with a B. Charting a somewhat similar path, the stock has a score of A on the value side, putting it in the top quintile for this investment strategy. Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in. Estimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise First American Financial has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months. First American Financial belongs to the Zacks Insurance - Property and Casualty industry. Another stock from the same industry, Progressive (PGR), has gained 6.4% over the past month. More than a month has passed since the company reported results for the quarter ended June 2026. Progressive reported revenues of $23.01 billion in the last reported quarter, representing a year-over-year change of +6.4%. EPS of $4.85 for the same period compares with $4.88 a year ago. Progressive is expected to post earnings of $3.77 per share for the current quarter, representing a year-over-year change of -6.9%. Over the last 30 days, the Zacks Consensus Estimate has changed +3.7%. The overall direction and magnitude of estimate revisions translate into a Zacks Rank #3 (Hold) for Progressive. Also, the stock has a VGM Score of B. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First American Financial Corporation (FAF) : Free Stock Analysis Report The Progressive Corporation (PGR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

As the Q2 earnings season wraps, let’s dig into this quarter’s best and worst performers in the property & casualty insurance industry, including First American Financial (NYSE:FAF) and its peers. Property & Casualty (P&C) insurers protect individuals and businesses against financial loss from damage to property or from legal liability. This is a cyclical industry, and the sector benefits when there is 'hard market', characterized by strong premium rate increases that outpace loss and cost inflation, resulting in robust underwriting margins. The opposite is true in a 'soft market'. Interest rates also matter, as they determine the yields earned on fixed-income portfolios. On the other hand, P&C insurers face a major secular headwind from the increasing frequency and severity of catastrophe losses due to climate change. Furthermore, the liability side of the business is pressured by 'social inflation'—the trend of rising litigation costs and larger jury awards. The 32 property & casualty insurance stocks we track reported a satisfactory Q2. As a group, revenues beat analysts’ consensus estimates by 2.3% while next quarter’s revenue guidance was 0.9% above. In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results. Tracing its roots back to 1889 when California was experiencing its first major real estate boom, First American Financial (NYSE:FAF) provides title insurance, settlement services, and risk solutions for residential and commercial real estate transactions across the United States and internationally. First American Financial reported revenues of $2.12 billion, up 15% year on year. This print exceeded analysts’ expectations by 3.4%. Overall, it was an exceptional quarter for the company with a beat of analysts’ EPS estimates. Interestingly, the stock is up 2.1% since reporting and currently trades at $71.99. Is now the time to buy First American Financial? Access our full analysis of the earnings results here, it’s free. Serving as a crucial bridge between homebuyers and the American dream of homeownership, Essent Group (NYSE:ESNT) provides private mortgage insurance and title services that enable lenders to offer home loans with down payments of less than 20%. Essent Group reported revenues of $362.7 million, up 13.6% year on year, outperforming analysts’ expectations by 9.7%. The business had a stunning quarter with a beat of analysts’ EPS estimates. The market seems content with the results as the stock is up 4.6% since reporting. It currently trades at $68.54. Is now the time to buy Essent Group? Access our full analysis of the earnings results here, it’s free. Founded during the housing boom of 1977 and weathering multiple real estate cycles since, Radian Group (NYSE:RDN) provides mortgage insurance and real estate services, helping lenders manage risk and homebuyers achieve affordable homeownership. Radian Group reported revenues of $580.7 million, up 90.8% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates. As expected, the stock is down 6.5% since the results and currently trades at $36.63. Read our full analysis of Radian Group’s results here. Founded in 1957 when the modern mortgage insurance industry was in its infancy, MGIC Investment (NYSE:MTG) provides private mortgage insurance that protects lenders when homebuyers default on their loans, enabling borrowers to purchase homes with smaller down payments. MGIC Investment reported revenues of $295.4 million, down 2.9% year on year. This result was in line with analysts’ expectations. It was a strong quarter as it also logged a beat of analysts’ EPS estimates. The stock is flat since reporting and currently trades at $30.72. Read our full, actionable report on MGIC Investment here, it’s free. Founded in 1961 and maintaining a network of over 6,300 independent agents across the country, Mercury General (NYSE:MCY) is an insurance company that primarily sells automobile insurance policies through independent agents in 11 states, with a strong focus on California. Mercury General reported revenues of $1.68 billion, up 13.8% year on year. This number topped analysts’ expectations by 10.3%. Overall, it was an exceptional quarter as it also put up a beat of analysts’ EPS estimates. The stock is down 2.6% since reporting and currently trades at $103.79. Read our full, actionable report on Mercury General here, it’s free. Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership. Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products. By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals. Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

The Progressive Corporation PGR reported earnings per share of $1.65 for July 2026, which declined 11% year over year. The downside was due to escalating expenses and net realized losses on securities. Progressive recorded net premiums written of $7.4 billion, up 5% from $7 billion in the year-ago month. Net premiums earned were about $7.3 billion, up 5% from $6.9 billion reported in the year-ago month.Net realized losses on securities were $47 million against a net realized income of $79 million from the year-ago month.Combined ratio — the percentage of premiums paid out as claims and expenses — deteriorated 150 basis points (bps) year over year to 86.8.PGR’s total revenues were $7.8 billion, up 27.1% year over year, owing to a 5.3% increase in premiums, a 10.9% jump in investment income, and 8.9% higher service revenues.Total expenses increased 7.1% to $6.6 billion, mainly due to higher losses and loss adjustment expenses, policy acquisition costs, other underwriting expenses, investment expenses, service expenses and interest expense.In July 2026, policies in force (PIF) were impressive for both Vehicle and Property businesses. In the Vehicle business, the Personal Auto segment recorded a 7% year-over-year increase to 39 million policies. Special Lines policies rose 6% from the year-earlier month to 7.3 million.In Progressive’s Personal Auto segment, Agency Auto PIF increased 7% to 11.3 million, while Direct Auto improved 9% to 16.8 million.PGR’s Commercial Auto segment policies rose 4% year over year to 1.2 million.The Property business had 3.6 million policies in force in the reported month, remaining unchanged year over year.The company’s book value per share was $59.64 as of July 31, 2026, up 4.8% from $56.92 on July 31, 2025.                        In the trailing 12 months, the return on equity was 31.3%, down 840 bps from 39.7% in July 2025. The debt-to-total-capital ratio deteriorated 240 bps year over year to 19.5 as of July 31, 2026. Progressive shares have lost 14% in the past year against the industry’s growth of 2.7%. Image Source: Zacks Investment Research Progressive currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the insurance industry are The Hanover Insurance Group, Inc. THG, First American Financial Corporation FAF and Mercury General Corporation MCY. While THG sports a Zacks Rank #1 (Strong Buy), FAF and MCY carry a Zacks Rank #2 (Buy) each at present. You can see the complete list of today’s Zacks #1 Rank stocks here.The Hanover Insurance’s earnings surpassed estimates in each of the last four quarters, the average surprise being 27.33%. Shares of THG have jumped 25.9% in the past year. The Zacks Consensus Estimate for THG’s 2026 and 2027 revenues implies year-over-year growth of 4.6% and 4.5%, respectively.First American’s earnings surpassed estimates in each of the last four quarters, with an average surprise of 23.58%. Shares of FAF have gained 12.5% in the past year. The Zacks Consensus Estimate for FAF’s 2026 and 2027 earnings implies year-over-year growth of 17.5% and 4%, respectively.Mercury General’s earnings surpassed estimates in each of the last four quarters, the average surprise being 70.21%. Shares of MCY have jumped 39.3% in the past year. The Zacks Consensus Estimate for MCY’s 2026 earnings implies year-over-year growth of 61.3%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Progressive Corporation (PGR) : Free Stock Analysis Report First American Financial Corporation (FAF) : Free Stock Analysis Report The Hanover Insurance Group, Inc. (THG) : Free Stock Analysis Report Mercury General Corporation (MCY) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

American Financial Group, Inc. AFG reported second-quarter 2026 net operating earnings per share of $2.82, which surpassed the Zacks Consensus Estimate by 17%. The bottom line increased 31.8% year over year, driven by underwriting income and stronger returns from its alternative investment portfolio. Total revenues of $2 billion increased 5% year over year.  The top line also beat the Zacks Consensus Estimate by 0.7%. The quarterly results benefited from record pretax Property & Casualty ("P&C") operating income, healthy premium growth, improved underwriting margins and higher investment income from alternative investments. American Financial Group, Inc. price-consensus-eps-surprise-chart | American Financial Group, Inc. Quote Net earned premiums rose 2.9% year over year to approximately $1.7 billion in the second quarter of 2026. The figure was slightly below both the Zacks Consensus Estimate and our estimate of $1.71 billion. Net investment income rose 20.1% year over year to $221 million in the quarter under review. The figure was higher than our estimate of $195.4 million and surpassed the Zacks Consensus Estimate of $197.9 million. Total costs and expenses increased 1.1% year over year to $1.7 billion due to higher underwriting expenses and interest charges, partly offset by lower losses and loss adjustment expenses. Our estimate was $1.72 billion. Specialty P&C Insurance: The segment generated $1.9 billion in net written premiums, which improved 6% year over year, reflecting new business opportunities, favorable renewal pricing and increased exposures while maintaining disciplined underwriting. The Specialty P&C Insurance segment’s underwriting profit increased 26.3% year over year to $144 million in the quarter, driven by higher underwriting profit across all three groups. The figure exceeded our estimate of $143 million. Pre-tax core operating earnings before income taxes of the P&C Insurance segment were $350 million, up 28.2% year over year. Property & Transportation Group: Net written premiums increased 5% year over year to $797 million in the second quarter, driven by crop insurance growth, favorable pricing and higher exposures. The Property & Transportation Group generated underwriting profit of $57 million, more than double the $27 million reported a year ago, driven by stronger transportation and agricultural business performance. The combined ratio improved 490 basis points year over year to 90.3%. Specialty Casualty Group: Net written premiums increased 6% year over year to $812 million. The Specialty Casualty Group generated underwriting profit of $45 million, down from $49 million in the prior-year quarter, due to lower workers' compensation and executive liability profitability, offset by strength in energy, construction and environmental liability businesses. The combined ratio deteriorated 60 basis points year over year to 94.5%. Specialty Financial Group: Net written premiums rose 10% year over year to $306 million. In the Specialty Financial Group, underwriting profit of $42 million, up from $38 million in the prior-year quarter, was primarily driven by stronger performance in its fidelity/crime and financial institutions businesses. Catastrophe losses in Specialty Financial Group totaled $10 million in the reported quarter, narrower than the year-ago loss of $39 million. The current combined ratio of 85.6% improved 50 basis points year over year. American Financial exited the second quarter of 2026 with total cash and investments of $17.1 billion, which decreased 0.7% from the 2025-end level. Long-term debt of $1.82 billion remained unchanged from the 2025-end level. As of June 30, 2026, the company’s book value per share, excluding accumulated other comprehensive income (AOCI), was $59.85 compared with $58.38 at the end of 2025. Annualized return on equity was 20.3% in the second quarter, up 50 basis points year over year. American Financial repurchased $26 million of its common stock in the second quarter of 2026. It paid total cash dividends of 88 cents per share, continuing its disciplined capital management strategy. American Financial currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. RLI Corp. RLI reported second-quarter 2026 operating earnings of 83 cents per share, which beat the Zacks Consensus Estimate by 16.9%. The bottom line increased 1.2% from the prior-year quarter’s level. Operating revenues amounted to $463 million, up 4.9% year over year. The top line beat the Zacks Consensus Estimate by 1.6%. Gross premiums written increased 3.1% year over year to $579.7 million, driven by strong growth in the casualty segment. Our estimate was $592.9 million. Net investment income increased 16.8% year over year to $46 million. The Zacks Consensus Estimate was $42.7 million. First American Financial Corporation FAF reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 4.4%. Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. Investment income totaled $183.7 million, up 14.7% year over year. The figure exceeded both our estimate and the Zacks Consensus Estimate of $182.3 million. The Hanover Insurance Group, Inc. THG reported second-quarter 2026 operating earnings of $5.31 per share, up 22.1% year over year. The figure beat the Zacks Consensus Estimate of $3.88 by 36.9%. Total revenues increased 4.6% year over year to $1.72 billion but missed the consensus mark of $1.73 billion by 0.4%. Net investment income increased 13.4% year over year to $119.6 million, driven by operating cash flows and higher earned yields. Catastrophe losses totaled $91.8 million, contributing 5.7 percentage points to the combined ratio, compared with 7.0 percentage points in the prior-year quarter. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RLI Corp. (RLI) : Free Stock Analysis Report First American Financial Corporation (FAF) : Free Stock Analysis Report American Financial Group, Inc. (AFG) : Free Stock Analysis Report The Hanover Insurance Group, Inc. (THG) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Aon plc AON reported second-quarter 2026 adjusted earnings of $3.81 per share, which surpassed the Zacks Consensus Estimate by 1.1%. The bottom line advanced 9% year over year. Total revenues of $4.2 billion grew 2% year over year.  The top line missed the consensus mark by 0.4%. Organic revenue growth was 5%. The quarterly results were supported by strong organic revenue growth, healthy client retention, operating margin expansion and disciplined execution. Solid performance across the Commercial Risk, Reinsurance and Health Solutions businesses was partly offset by weakness in Wealth Solutions. Aon plc price-consensus-eps-surprise-chart | Aon plc Quote Total operating expenses inched up 1% year over year to $3.3 billion due to higher expenses related to organic revenue growth, investments in long-term growth and unfavorable foreign currency translation. This was partly offset by lower expenses associated with the sale of NFP Wealth. The metric was in line with our estimate. Adjusted operating income amounted to $1.2 billion, up 5% year over year and in line with our estimate. The metric benefited from organic revenue growth, scale improvements in ABS and net restructuring savings, partially offset by growth investments. Adjusted operating margin improved 70 basis points year over year to 28.9%. Commercial Risk Solutions: Organic revenues rose 5% year over year in the second quarter on the back of new business and strong retention rates across North America and EMEA. Revenues in this solution line advanced 5% year over year to $2.3 billion, in line with the Zacks Consensus Estimate. Reinsurance Solutions: Organic revenues grew 5% year over year, driven by increased treaty placements, new business wins and strong client retention, along with growth in facultative placements. Revenues amounted to $711 million, which improved 3% year over year but missed the consensus mark by 1%. Health Solutions: Organic revenues inched up 5% year over year as a result of new business growth, strong retention rates and positive market impact. The solution line’s revenues increased 6% year over year to $818 million, which beat the Zacks Consensus Estimate by 0.4%. Wealth Solutions: Organic revenue growth of 5% was driven by expansion in Retirement and continued demand for advisory services in the UK and EMEA amid ongoing regulatory changes. Revenues totaled $426 million, down 18% year over year. The metric lagged the consensus mark by 3.2%. Aon exited the second quarter with cash and cash equivalents of $1.1 billion, which declined 11.1% from the 2025-end level. Total assets of $53.3 billion increased 5% from the 2025-end figure. Long-term debt amounted to $12.9 billion, down 11.7% from the figure as of Dec. 31, 2025. Short-term debt and the current portion of long-term debt totaled $2 billion. Aon generated cash flow from operations of $556 million, which decreased 30% year over year. Adjusted free cash flow decreased 34% year over year to $483 million. Aon bought back 1.9 million Class A ordinary shares for roughly $600 million in the second quarter of 2026. It also returned $175 million to shareholders through dividends. As of June 30, 2026, the company had approximately $7.7 billion remaining under its share repurchase authorization. Revenues are expected to witness mid-single-digit or higher organic growth in 2026. The company anticipates adjusted operating margin expansion of 70-80 basis points. It projects strong growth in adjusted EPS for the year. Free cash flow is likely to grow at a double-digit rate, while the tax rate is expected to be in the 19.5-20.5% range. AON currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Of the insurance industry players that have reported second-quarter 2026 results so far, the bottom-line figures of RenaissanceRe Holdings Ltd. RNR, Chubb Limited CB and First American Financial Corporation FAF beat their respective Zacks Consensus Estimate. RenaissanceRe reported second-quarter 2026 operating income of $12.92 per share, which surpassed the Zacks Consensus Estimate by 12.9%.  The bottom line also improved 5.1% year over year. Total operating revenues declined 6.7% year over year to $2.64 billion. The top line missed the consensus mark by 1%. Net premiums earned declined 8.8% year over year to $2.2 billion. Net investment income of $432.5 million advanced 4.7% year over year.  RenaissanceRe's underwriting income declined 0.4% year over year to $599.1 million. The combined ratio improved to 72.8% from 75.1% in the year-ago quarter. The Property segment’s net premiums earned of $881.6 million increased 1.6% year over year. Chubb’s second-quarter 2026 core operating earnings of $7.26 per share beat the Zacks Consensus Estimate of $6.63 by 9.5%. The bottom line increased 18.2% year over year. Revenues rose 2.7% year over year to $15.77 billion but missed the consensus mark of $15.90 billion by 0.8%. P&C underwriting income increased 18.8% year over year to $1.94 billion. The combined ratio improved 180 basis points to 83.8%.Consolidated net premiums written increased 3.6% year over year to $14.71 billion. Pre-tax net investment income increased 12.3% to a record $1.76 billion. Chubb’s Global P&C net premiums written, excluding agriculture, advanced 2.8% to $11.99 billion. Life insurance net premiums written grew 7.5% to $1.94 billion. First American Financial reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion. The top line surpassed the consensus estimate by 4.4%. Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. First American’s Investment income totaled $183.7 million, up 14.7% year over year. In the Title Insurance and Services unit, total revenues rose 16.9% year over year to $2 billion. Investment income increased 11% to $164 million. Adjusted pretax margin expanded 310 bps to 15.7%. Title open orders increased 0.7% to 188,200, while closed orders declined 0.7% to 137,300. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Aon plc (AON) : Free Stock Analysis Report Chubb Limited (CB) : Free Stock Analysis Report RenaissanceRe Holdings Ltd. (RNR) : Free Stock Analysis Report First American Financial Corporation (FAF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

RLI Corp. RLI reported second-quarter 2026 operating earnings of 83 cents per share, which beat the Zacks Consensus Estimate by 16.9%. The bottom line increased 1.2% from the prior-year quarter. The quarterly results reflect continued premium growth, higher investment income and favorable prior-year reserve development. However, weaker underwriting performance in the casualty segment partly offset these positives. Operating revenues for the reported quarter were $463 million, up 4.9% year over year, driven by higher net premiums earned and net investment income. The top line beat the Zacks Consensus Estimate by 1.6%. RLI Corp. price-consensus-eps-surprise-chart | RLI Corp. Quote Gross premiums written (GPW) increased 3.1% year over year to $579.7 million, driven by strong growth in the casualty segment. Our estimate was $592.9 million. Net investment income increased 16.8% year over year to $46 million. The Zacks Consensus Estimate was $42.7 million, while our estimate for the metric was pegged at $40.7 million. The investment portfolio’s total return was 3.4% in the second quarter. Total expenses increased 6.4% year over year to $367.9 million, primarily due to higher policy acquisition costs, insurance operating expenses and interest expense on debt. Our estimate was $376.8 million. Underwriting income fell 3.7% year over year to $59.9 million. Our estimate was $53.1 million. The combined ratio deteriorated 110 basis points year over year to 85.6, reflecting higher catastrophe losses. Our estimate was 87.2. Casualty lines’ GPW rose 10.6% year over year to $339 million. The figure was above our estimate of $338.1 million. The underwriting income decreased significantly to $1.7 million from $8.3 million, down 79% year over year. The combined ratio deteriorated 280 bps year over year to 99.3%. The figure was above our estimate of 98.4%. Property lines’ GPW fell 5.9% year over year to $199.3 million. The figure was below our estimate of $207.7 million. The underwriting income increased to $53.5 million, up 8.1%, supported by favorable reserve development. The combined ratio improved 530 bps year over year to 56.8%. Our estimate was 65.2%. Surety lines’ GPW declined 5.7% year over year to $41.4 million. The figure was below our estimate of $47.1 million. The underwriting income improved 5.4% year over year to $4.7 million. The combined ratio improved 70 bps year over year to 87.2%. Our estimate was 84.8%. RLI exited the second quarter with total investments and cash of $4.9 billion, up 4.5% from 2025-end level. Book value was $19.09 per share as of June 30, 2026, up 11% from Dec. 31, 2025. Net cash flow from operations was $145.2 million, down 16.9% year over year. The statutory surplus increased 5.2% from 2025-end to $1.94 billion as of June 30, 2026. Return on equity was 24.5%, expanding 480 bps from the year-ago period. On June 12, 2026, the insurer paid a regular quarterly dividend of 18 cents per share for the second quarter. RLI’s cumulative dividends totaled more than $1.3 billion over the last five years. On May 14, 2026, the board of directors approved a $250 million share repurchase program. The company repurchased 0.2 million shares for $12 million during the second quarter. As of June 30, 2026, $238 million remained available under the authorization. RLI currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. First American Financial Corporation FAF reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 4.4%. Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. Investment income totaled $183.7 million in the second quarter, up 14.7% year over year. The figure exceeded both our estimate and the Zacks Consensus Estimate of $182.3 million. The Travelers Companies, Inc. TRV reported second-quarter 2026 core income of $10.04 per share, which beat the Zacks Consensus Estimate of $5.21 by 92.7%. The bottom line climbed 54% year over year. Revenues of $12.09 billion missed the Zacks Consensus Estimate of $12.27 billion by 1.5%. Net investment income rose 14% year over year to $1.07 billion pre-tax ($883 million after tax). The combined ratio improved 670 basis points year over year to 83.6%, reflecting lower catastrophe losses, stronger reserve development and a better underlying combined ratio. W.R. Berkley Corporation WRB reported second-quarter 2026 operating income of $1.27 per share, which beat the Zacks Consensus Estimate by 16.5%. The bottom line increased 21% year over year. Operating revenues totaled $3.8 billion, up 3.6% year over year. The top line surpassed the consensus estimate by 1.87%. W.R. Berkley’s net premiums written were about $3.4 billion, up 2.4% year over year. The figure surpassed our estimate of $3.4 billion. The consolidated combined ratio (a measure of underwriting profitability) improved 160 basis points year over year to 90, missing the Zacks Consensus Estimate of 92. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report RLI Corp. (RLI) : Free Stock Analysis Report The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report W.R. Berkley Corporation (WRB) : Free Stock Analysis Report First American Financial Corporation (FAF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

The Hartford Insurance Group, Inc. HIG delivered second-quarter fiscal 2026 earnings per share of $3.42, up 6% year over year and above the Zacks Consensus Estimate of $3.12 by 9.6%. Revenues came in at $5.23 billion, topping the consensus mark of $5.19 billion by 0.8%. The top line improved 6.8% year over year. The quarterly results benefited from higher investment income, premium growth in Business Insurance and improving Personal Insurance profitability. Strong new business expansion in Small Business and favorable pricing trends supported results. However, the upside was partly offset by an increased expense level, higher catastrophe losses and weaker Employee Benefits profitability. The Hartford Insurance Group, Inc. price-consensus-eps-surprise-chart | The Hartford Insurance Group, Inc. Quote The Hartford’s second-quarter core earnings inched up 1% year over year to $945 million. Net income available to common stockholders rose 31% year over year to $1.3 billion, helped by stronger operating performance and income from discontinued operations. Earned premiums grew 5.3% year over year to $6.3 billion, marginally higher than the Zacks Consensus Estimate. Net investment income, before tax, advanced 22% year over year to $800 million, higher than the consensus mark of $746 million. The increase reflected higher income from limited partnerships and other alternative investments, along with growth in invested assets. Total benefits, losses and expenses escalated 8.8% year over year to $6 billion due to higher amortization of DAC and insurance operating expenses. P&C current accident year catastrophe losses were $222 million, up 4.7% year over year. The Business Insurance unit remained the largest contributor to operating performance, with written premiums rising 5% year over year to $4 billion. Net income rose 1% to $704 million, while core earnings declined marginally year over year to $695 million, as higher premium growth and investment income were offset by underwriting pressures. The segment’s combined ratio deteriorated to 91.4 from 87 in the prior-year quarter, pressured by less favorable prior-year development and higher catastrophe losses. The metric compared favorably with the Zacks Consensus Estimate of 92. Small Business delivered improvement, with written premiums increasing 7% year over year and the combined ratio improving to 85.9. Growth was supported by double-digit new business expansion. Personal Insurance continued its turnaround, with core earnings rising 36% year over year to $128 million. Written premiums declined 7% to $915 million as competitive market conditions weighed on growth. Profitability improved significantly, with the combined ratio improving to 90.1 from 94.1 in the prior-year quarter. The metric compared favorably with the consensus mark of 97. The segment’s underlying loss and loss adjustment expense ratio improved 280 basis points to 60. Pricing increases outpaced loss cost trends, helping offset pressure from lower earned premiums and higher expenses. P&C Other Operations reported core earnings of $17 million, up 21% year over year. Revenues increased 35.3% year over year to $23 million. Employee Benefits reported core earnings of $139 million, down 15% year over year. The decline reflected higher losses, particularly in group disability, although premium growth remained positive. Fully insured ongoing premiums increased 5% to $1.7 billion. The segment’s core earnings margin was 7.4%, supported by strong life results and solid disability performance. The loss ratio deteriorated to 72.5% from 69.1% in the prior-year quarter, while the expense ratio improved to 25.2% from 25.7% due to earned premium growth and lower commissions, partially offset by higher technology costs. Hartford Funds was reclassified as discontinued operations following the agreement to sell Hartford Funds Management, Inc. The transaction resulted in income from discontinued operations of $318 million before tax in the second quarter of fiscal 2026 compared with $57 million in the prior-year quarter, primarily due to a $251 million income tax benefit related to the sale. Corporate reported net income of $300 million in the quarter compared with $45 million a year ago, while core earnings resulted in a loss of $34 million, narrower than a loss of $36 million in the prior-year period. The improvement in reported results was primarily driven by the Hartford Funds transaction impact. The Hartford exited the second quarter with total assets of $88 billion, up 2.3% from 2025-end, while total investments inched up 0.8% from 2025-end level to $64 billion. Cash rose 2.5% to $125 million during the same period. Debt remained largely stable at $4.4 billion. Total stockholders’ equity came in at $19.6 billion, up 3.4% from year-end 2025. Book value per share excluding AOCI improved 7.2% year over year to $78.91. Operating cash flow was $2.2 billion in the first half of 2026, down marginally from the prior-year comparable period. The Hartford continued its capital deployment efforts during the quarter, returning $615 million to shareholders. The company repurchased $450 million of shares and paid $165 million in common stock dividends. The board also authorized a new $4.2 billion share repurchase program effective Aug. 1, 2026, through the end of 2028. This authorization represents a 27% increase from the previous program. The company generated a trailing 12-month core earnings return on equity of 18.7%, which improved 270 basis points year over year. The Hartford currently has a Zacks Rank #4 (Sell). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. Of the insurance industry players that have reported second-quarter 2026 results so far, the bottom-line results of RenaissanceRe Holdings Ltd. RNR, Chubb Limited CB and First American Financial Corporation FAF beat the respective Zacks Consensus Estimate. RenaissanceRe reported second-quarter 2026 operating income of $12.92 per share, which surpassed the Zacks Consensus Estimate by 12.9%.  The bottom line also improved 5.1% year over year. Total operating revenues declined 6.7% year over year to $2.64 billion. The top line missed the consensus mark by 1%. Net premiums earned declined 8.8% year over year to $2.2 billion. Net investment income of $432.5 million advanced 4.7% year over year in the quarter. RenaissanceRe's underwriting income declined 0.4% year over year to $599.1 million. The combined ratio improved to 72.8% from 75.1% in the year-ago quarter. The Property segment’s net premiums earned of $881.6 million increased 1.6% year over year. It generated an underwriting income of $642.7 million, which increased 2% year over year. The Casualty & Specialty Segment unit recorded net premiums earned of $1.3 billion, which tumbled 14.7% year over year to $1.32 billion. Chubb’s second-quarter 2026 core operating earnings of $7.26 per share beat the Zacks Consensus Estimate of $6.63 by 9.5%. The bottom line increased 18.2% year over year. Revenues rose 2.7% year over year to $15.77 billion but missed the consensus mark of $15.90 billion by 0.8%. P&C underwriting income increased 18.8% year over year to $1.94 billion. The combined ratio improved 180 basis points to 83.8%. Consolidated net premiums written increased 3.6% year over year to $14.71 billion. Pre-tax net investment income increased 12.3% to a record $1.76 billion. Global P&C net premiums written, excluding agriculture, advanced 2.8% to $11.99 billion. Life insurance net premiums written grew 7.5% to $1.94 billion. North America Commercial P&C net premiums written declined 2.3% to $5.59 billion. Major accounts and specialty fell 9.0% as underwriting actions weighed on property business, while middle-market and small commercial premiums increased 8.9% to $2.34 billion. Overseas General Insurance net premiums written jumped 10.2% to $3.99 billion, or 4.8% in constant dollars. First American Financial reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion. The top line surpassed the consensus estimate by 4.4%. Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. Investment income totaled $183.7 million in the second quarter, up 14.7% year over year. In the Title Insurance and Services unit, total revenues rose 16.9% year over year to $2 billion. Investment income increased 11% to $164 million. Adjusted pretax margin expanded 310 bps to 15.7%. Title open orders increased 0.7% to 188,200, while closed orders declined 0.7% to 137,300. Average revenue per direct title order increased to $4,572, reflecting a 31% increase in commercial average revenue per order. In the Home Warranty segment, total revenues rose 3.3% to $113.8 million, exceeding our model estimate of $111 million. Pretax income climbed 8.5% year over year to $24.2 million. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report The Hartford Insurance Group, Inc. (HIG) : Free Stock Analysis Report Chubb Limited (CB) : Free Stock Analysis Report RenaissanceRe Holdings Ltd. (RNR) : Free Stock Analysis Report First American Financial Corporation (FAF) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research

Our analysts just identified a stock with the potential to be the next Nvidia. Tell us how you invest and we'll show you why it's our #1 pick. Tap here. Commercial revenue reached a second quarter record, increasing 34% due to broad-based demand across 10 of 11 asset classes and a higher volume of large-scale transactions. First American Trust is evolving into a countercyclical engine, with 36% of deposits now originating from non-captive sources like mortgage subservicing and 1031 Exchange solutions. The company is fundamentally reimagining title and settlement through the Endpoint and Sequoia platforms, shifting employee roles from routine task execution to AI-generated work validation. AI deployment is delivering tangible efficiency gains, including a 97% reduction in time for large-scale form updates and a 92% automated pass rate for quality control workflows. ServiceMAC loan portfolio growth of 54% is driving significant deposit inflows, despite a flat broader mortgage market, reinforcing the bank's strategic value. Residential purchase revenue remains constrained by affordability challenges, though the company maintains a cautious outlook relative to broader market consensus. Management maintains its forecast for a record year in commercial business, supported by a pipeline that is currently at its strongest historical level. The Endpoint platform is on a trajectory for a full national rollout by the end of 2027, with statewide expansion in Washington expected by year-end 2026. Sequoia title decisioning is targeted to automate approximately 70% of purchase and 80% of refinance transactions in markets where the company maintains title plans. Technology investments are expected to remain within the existing run rate, with management anticipating no material increase in spend to achieve AI scaling goals. Capital allocation will prioritize organic technology leadership and strategic acquisitions with high synergy, alongside opportunistic share repurchases and dividend growth. The success ratio of 66% exceeded the 60% target due to intentional front-loaded investments in ServiceMAC to support its rapid loan portfolio expansion. Refinance activity remains highly sensitive to interest rate volatility, with a brief surge in Q2 volumes already moderating as mortgage rates moved higher. The debt-to-capital ratio of 31.4% currently sits above the 20% long-term target, though management views this as comfortable given the current market trough. Regulatory uncertainty persists regarding potential FHFA or Fannie Mae expansions into title acceptance pilots, though no incremental updates were reported. One stock. Nvidia-level potential. 30M+ investors trust Moby to find it first. Get the pick. Tap here. Growth is driven by diversifying deposit sources beyond captive title operations into agent banking and mortgage servicing. Management expects investment income net of interest expense to grow at approximately 8% for the remainder of the year. Average Revenue Per Order (ARPO) is expected to stay elevated due to a strong pipeline of large-scale deals, particularly in industrial and data center sectors. Data center revenue increased 140% year-over-year, often involving billion-dollar transactions with multiple premium opportunities across land acquisition and construction. Full-year margin expansion will depend heavily on the strength of the commercial business in the fourth quarter. The elevated success ratio is attributed to supporting non-title growth businesses and is expected to normalize as investments mature.

This article first appeared on GuruFocus. Adjusted Earnings Per Share: $2.08, an increase of 36% from the prior year. GAAP Earnings Per Share: $2.12 per diluted share. Adjusted Total Revenue: $2 billion, up 14% compared with the same quarter of 2025. Commercial Revenue: $314 million, a 34% increase over last year. Average Revenue Per Order: $19,980 per transaction, a record level for the commercial business. Purchase Revenue: Up 2% during the quarter. Refinance Revenue: Up 18% compared with last year. Agency Business Revenue: $820 million, up 14% from last year. Information and Other Revenues: $295 million, up 12% compared with last year. Investment Income: $164 million, up 11% compared with the same quarter last year. Personnel Costs: $572 million, up 9% compared with the same quarter of 2025. Other Operating Expenses: $319 million, up 15% compared with last year. Provision for Policy Losses and Other Claims: $45 million, unchanged from the prior year. Interest Expense: $30 million, up 33% compared with last year. Pretax Margin in Title Segment: 15.7% or 14.0% on an adjusted basis. Home Warranty Segment Revenue: $112 million, up 1% compared with last year. Home Warranty Segment Loss Ratio: 40%, down from 41% in the second quarter of 2025. Effective Tax Rate: 22.8%, slightly below the normalized tax rate of 24%. Debt-to-Capital Ratio: 31.4%; excluding secured finances payable, 21.5%. Share Repurchases: 330,000 shares for $20 million at an average price of $61.99. Warning! GuruFocus has detected 7 Warning Sign with FAF. Is FAF fairly valued? Test your thesis with our free DCF calculator. Release Date: July 23, 2026 For the complete transcript of the earnings call, please refer to the full earnings call transcript. First American Financial Corp (NYSE:FAF) reported a 36% increase in adjusted earnings per share, reaching $2.08. Commercial revenue increased by 34%, setting a second-quarter record with 14 transactions generating over $1 million in premium. The company's bank, First American Trust, saw average deposits grow by 30% year-over-year, driven by non-title sources like ServiceMac and 1031 Exchange business. AI initiatives have significantly improved operational efficiency, reducing form update time by 97% and enhancing customer service with virtual agents. The company is optimistic about its commercial business, with a strong pipeline and increasing average revenue per order (ARPU). Purchase revenue only increased by 2% due to affordability challenges impacting existing home sales. Refinance revenue growth, although up 18%, was supported by a temporary decline in mortgage rates, which have since risen again. Personnel costs increased by 9% due to higher incentive compensation and salary expenses. The success ratio was higher than the target, primarily due to investments in businesses outside of domestic Title operations, such as ServiceMac. The residential purchase market remains sluggish, with open purchase orders flat relative to last year. Q: Can you expand on the sustainability of ServiceMac's above-average deposit inflow and the investment income outlook for the back half of the year? A: Mark Seaton, CEO: ServiceMac's loan growth is up 54% from last year, despite a flat market, indicating sustainable deposit growth. We aim to push deposits to First American Trust whenever possible. Matthew Wajner, CFO: Investment income grew 11% year-over-year, driven by deposit growth at the bank. Net of interest expense, it grew 8%, which is a good proxy for the back half of the year. Q: What is the outlook for commercial ARPU in the second half, and how sustainable are these increases? A: Mark Seaton, CEO: We are bullish on commercial ARPU, which continues to grow due to larger deals. The commercial market has strong legs, supported by a robust pipeline and early stages of the next real estate cycle. Q: Can you provide insights into the title segment margins and expectations for the full year? A: Matthew Wajner, CFO: Year-to-date margin in the Title segment is 12.3%. We expect expansion in the back half, closely tied to the commercial business's strength, particularly in Q4. Q: How are you approaching share buybacks, and does the increase in debt-to-capital ratio affect this strategy? A: Matthew Wajner, CFO: We approach buybacks opportunistically, looking for market dislocations. The current debt-to-capital ratio is comfortable and does not impact our buyback decisions. Q: What are the strongest growth areas in commercial asset classes, and how are data centers performing? A: Mark Seaton, CEO: Development sites, multifamily, and retail are showing strong growth. Data centers are up 147% year-over-year, contributing significantly to ARPU growth with high-premium deals. For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Interested in First American Financial Corporation? Here are five stocks we like better. First American Financial beat expectations in Q2, with adjusted earnings per share of $2.08, up 36% year over year, helped by stronger commercial title activity, higher investment income and AI-related efficiency gains. Commercial title was the standout business, as revenue jumped 34% to a second-quarter record of $314 million and the company said its commercial pipeline is “stronger than ever,” with broad-based growth across most asset classes. Residential purchase demand remained soft due to affordability and housing-market weakness, while refinance activity improved year over year but remains well below historical norms and has slowed as mortgage rates rose again. First American Financial (NYSE:FAF) reported stronger second-quarter earnings as growth in commercial title activity, higher investment income tied to deposit growth and continued investment in artificial intelligence initiatives helped offset sluggish residential purchase demand. On the company’s second-quarter 2026 earnings call, Chief Executive Officer Mark Seaton said First American generated adjusted earnings per share of $2.08, up 36% from the prior year. Chief Financial Officer Matt Wajner said GAAP earnings were $2.12 per diluted share, while adjusted earnings excluded net investment gains and purchase-related intangible amortization. → Could Truth API Become Trump Media’s First Meaningful Revenue Driver? “Our earnings momentum continued in the second quarter,” Seaton said, highlighting commercial as a “standout performer.” Commercial revenue increased 34% from the year-ago period to $314 million, according to Wajner. The gain was driven by a 31% increase in average revenue per order, which reached $19,980 per transaction, a record for the company’s commercial business. → 3 Photonics Companies Making Quantum Tech Possible Seaton said commercial revenue set a second-quarter record, with the company closing 14 transactions that generated more than $1 million in premium, compared with 11 such transactions a year earlier. Within First American’s National Commercial Services division, Seaton said demand remained broad-based, with 10 of 11 asset classes growing year-over-year. During the question-and-answer portion of the call, Seaton said industrial represented 23% of commercial premium, followed by multifamily at 16%, development sites at 14% and retail at 14%. He added that development site revenue was up 33% from last year, multifamily rose 23% and retail increased 59%. Data center revenue rose 147%, but Seaton emphasized that commercial growth was not limited to that category. → AeroVironment’s Stock Is Down, But Drone Demand Is Taking Off “We’re seeing broad-based growth,” Seaton said. “It’s not like we’re just doing a few data centers that are driving our revenue.” Seaton said First American’s commercial pipeline “has never been stronger,” noting that the company had already closed three transactions generating more than $1 million in premium during July and that commercial open orders were up 9% over the first three weeks of the month. Residential purchase revenue increased 2% during the quarter, with Wajner citing a 6% increase in average revenue per order that was partially offset by a 3% decline in closed orders. He said the decline in closed purchase orders reflected continued weakness in home sale activity. Seaton said affordability challenges continued to weigh on existing home sales. Through the first three weeks of July, open purchase orders were flat compared with last year, and he said the company remained “more cautious than the broader consensus” on the residential purchase market. Refinance revenue rose 18% year-over-year, supported by a brief decline in mortgage rates earlier in the year. Wajner said refinance closed orders increased 12%, while average revenue per order rose 5%. However, both executives noted that refinance activity has moderated as mortgage rates moved higher again. Wajner said refinance accounted for just 5% of direct revenue during the quarter, underscoring how challenged the market remains relative to historical levels. Seaton identified First American Trust as one of the company’s most important earnings drivers, calling it a growing source of investment income. Average deposits at the bank totaled $7.9 billion in the quarter, up 30% from last year. Seaton said 36% of deposits came from sources outside the company’s captive title operations. ServiceMac, First American’s mortgage sub-servicer, was the largest contributor to non-title deposits, accounting for $1.7 billion, up 76% from last year. Seaton said ServiceMac’s loan portfolio grew 54% during the quarter and that deposits should increase as the portfolio expands. The company’s 1031 exchange banking solution also contributed to deposit growth. Seaton said average deposits from that business were $827 million in the second quarter, representing about one-third of total 1031 balances, less than a year after the solution launched. He also said 310 title agents now bank with First American Trust, up 37% from last year. Wajner said investment income was $164 million in the second quarter, up 11% from the year-ago period, driven primarily by growth in the investment portfolio tied to higher deposits. Interest expense increased 33% to $30 million because of higher deposit balances at First American Trust. In response to an analyst question, Wajner said investment income net of interest expense grew 8% year-over-year and said that figure was a “good proxy” for growth in the second half of the year. Seaton said First American’s primary strategic priority remains using artificial intelligence across the company to improve productivity, customer service and operating capabilities. He cited several examples, including a project to update 1,300 forms that historically required a lengthy manual process. Seaton said new AI tools reduced the time required by 97%. The company also launched Exam Assist QC, an AI-enabled quality control workflow that has processed more than 50,000 orders, with 92% requiring no additional human review. At ServiceMac, Seaton said a virtual agent for loan transfer inquiries improved self-service success from 0% in April to 42% in June, with plans to expand from one self-service use case to seven by year-end. Seaton also updated investors on Endpoint and Sequoia, two platforms tied to First American’s efforts to reimagine title and settlement processes. Endpoint, which uses agentic AI to automate routine escrow tasks, remains on track to scale across the company’s local title branch network by the end of 2027. First American converted its first title office in Spokane, Washington, during the quarter and plans a statewide rollout in Washington by year-end before a broader national deployment in 2027. Sequoia, the company’s AI-powered title decisioning platform, expanded refinance capabilities into a centralized lender division in Southern California and broadened California refinance coverage from eight counties to 41. Seaton said the refinance automation rate improved from 35% to 40% during the quarter. For purchase transactions, Sequoia currently provides instant title decisioning for about 16% of purchase orders at opening in certain counties, with management seeing longer-term potential to automate about 70% of purchase title decisions and 80% of refinance decisions in markets where First American maintains title plants. In the title segment, adjusted total revenue was $2 billion, up 14% from the same quarter of 2025. Wajner said agency revenue was $820 million, up 14%, while information and other revenue rose 12% to $295 million, driven by ServiceMac revenue growth, higher demand for non-insured information products and services, and refinance activity in Canadian operations. Personnel costs rose 9% to $572 million, mainly due to incentive compensation tied to improved financial performance and higher salary expense. Other operating expenses increased 15% to $319 million, primarily reflecting higher production expenses from higher volumes and increased software expense. The title segment’s pretax margin was 15.7%, or 14.0% on an adjusted basis. The home warranty segment reported adjusted total revenue of $112 million, up 1%. Its loss ratio improved to 40% from 41% a year earlier, as lower claim frequency was partially offset by higher claim severity. Adjusted pretax margin in the segment was 20.2%. Seaton said free cash flow totaled $285 million in the first six months of the year, up 32% from last year, driven by improving operating cash flow and an 18% decline in capital expenditures. He said First American’s top capital allocation priority remains investing in technology, platforms and products, followed by acquisitions with strong strategic synergies and returning capital through dividends and opportunistic share repurchases. During the quarter, First American repurchased 330,000 shares for $20 million at an average price of $61.99, Wajner said. Seaton said the company is not currently in the market repurchasing shares but continues to evaluate buybacks opportunistically. He added that the company expects to continue increasing its dividend over time. First American Financial Corporation is a leading provider of title insurance, settlement services and diversified real estate-related data and analytics. Headquartered in Santa Ana, California, the company serves customers throughout the United States as well as in Canada, Europe, Latin America and Asia. Its business is built on the underwriting capabilities of its title insurance operations combined with comprehensive closing and escrow services for homebuyers, sellers, mortgage lenders and real estate professionals. The company's title insurance segment issues policies that protect property owners and mortgage lenders against defects in titles, liens or encumbrances that can arise during real property transactions. This instant news alert was generated by narrative science technology and financial data from MarketBeat in order to provide readers with the fastest reporting and unbiased coverage. Please send any questions or comments about this story to [email protected]. The article "First American Financial Q2 Earnings Call Highlights" was originally published by MarketBeat. View MarketBeat's top stocks for July 2026.

First American Financial Corporation FAF reported second-quarter 2026 operating earnings of $2.08 per share, which beat the Zacks Consensus Estimate by 15.6% and rose 35.9% year over year. Operating revenues climbed 15% to $2.1 billion, driven by growth in direct premiums, escrow fees, and Information and other revenues. The top line surpassed the consensus estimate by 4.4%. The quarterly results benefited from robust commercial title business, higher average revenue per order, solid investment income growth and continued strength in information and subservicing businesses. Elevated operating expenses partly offset these gains. First American Financial Corporation price-consensus-eps-surprise-chart | First American Financial Corporation Quote Direct premiums and escrow fees reached $794.1 million, marking a 14.8% increase from the prior-year level. The figure exceeded the Zacks Consensus Estimate and our model estimate by 2.3%. Investment income totaled $183.7 million in the second quarter, up 14.7% year over year, supported by higher interest income from the investment portfolio. The title segment increased 12% in investment income, partially offset by losses at the corporate level. The figure was above our estimate and the Zacks Consensus Estimate of $182.3 million. Expenses increased 11.4% to $1.83 billion, primarily due to higher personnel costs, production expenses, premiums retained by agents and a rise in interest expense. The figure was above our estimate of $1.80 billion. Title Insurance and Services: Total revenues rose 16.9% year over year to $2 billion, which beat the Zacks Consensus Estimate by 6.2%. This was driven by 15% growth in direct premiums and escrow fees, agent premiums and steady net investment income. Investment income increased 11% to $164 million, supported by higher interest income from the company's investment portfolio. Adjusted pretax margin expanded 310 bps to 15.7%. Title open orders increased 0.7% to 188,200, while closed orders declined 0.7% to 137,300. Average revenue per direct title order increased to $4,572, reflecting a 31% increase in commercial average revenue per order, partially offset by a mix shift toward lower-premium refinance transactions. Home Warranty: Total revenues rose 3.3% to $113.8 million, exceeding our model estimate of $111 million. Pretax income climbed 8.5% year over year to $24.2 million. The claim loss rate improved to 40%, due to lower claim frequency, partly offset by higher claim severity. Pretax margin expanded 110 basis points to 21.3%. Corporate: The Corporate segment reported a net pretax loss of $56.2 million, narrowing from a $43.8 million loss in the year-ago quarter. First American exited the second quarter of 2026 with cash and cash equivalents of $2.6 billion, up 89.6% from the 2025-end level.Notes and contracts payable were $1.5 billion, remaining flat from the 2025-end level. Stockholders’ equity was $5.6 billion at the end of the second quarter of 2026, up 2.2% from the 2025-end level. The debt-to-capital ratio was 31.4. The board of directors paid a dividend of 55 per cent per share in the second quarter. FAF repurchased 0.3 million shares for $20 million in the reported quarter at an average price of $61.99 per share. FAF currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. The Progressive Corporation’s PGR second-quarter 2026 earnings per share of $4.85 beat the Zacks Consensus Estimate by 3.2%. The bottom line, however, decreased 6.1% year over year. Net premiums written were $21.1 billion in the quarter, up 5% from $20.1 billion a year ago. Net premiums earned grew 6% to $21.6 billion, in line with the Zacks Consensus Estimate. Net realized gains on securities were $604 million, up 56% year over year. The combined ratio, the percentage of premiums paid out as claims and expenses, deteriorated 110 basis points from the prior-year quarter’s level to 87.1. The Travelers Companies, Inc. TRV reported second-quarter 2026 core income of $10.04 per share, which beat the Zacks Consensus Estimate of $5.21 by 92.7%. The bottom line climbed 54% year over year. Revenues of $12.09 billion missed the Zacks Consensus Estimate of $12.27 billion by 1.5%. Net investment income rose 14% year over year to $1.07 billion pre-tax ($883 million after tax). The combined ratio improved 670 basis points year over year to 83.6%, reflecting lower catastrophe losses, stronger reserve development and a better underlying combined ratio. W.R. Berkley Corporation WRB reported second-quarter 2026 operating income of $1.27 per share, which beat the Zacks Consensus Estimate by 16.5%. The bottom line increased 21% year over year. W.R. Berkley’s net premiums written were about $3.4 billion, up 2.4% year over year. The figure surpassed our estimate of $3.4 billion. Operating revenues totalled $ 3.8 billion, up 3.6% year over year.  The top line surpassed the consensus estimate by 1.87%. Net investment income grew 10.4% to $418.7 million, supported by higher invested assets and higher portfolio yields. The figure topped our estimate of $407 million. The Zacks Consensus Estimate was $395.6 million. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report First American Financial Corporation (FAF) : Free Stock Analysis Report The Travelers Companies, Inc. (TRV) : Free Stock Analysis Report W.R. Berkley Corporation (WRB) : Free Stock Analysis Report The Progressive Corporation (PGR) : Free Stock Analysis Report This article originally published on Zacks Investment Research (zacks.com). Zacks Investment Research